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New survey shows CFO compensation poised to improve

CFO compensation rising

After CFOs experienced a negative trend in terms of compensation during the thick of the financial crisis, the financial bosses of both public and private companies are expected to see higher compensation in 2011, according to a new survey.

The 2011 CFO Incentives and Compensation Survey, which was conducted by Dr. Michal Matejka of the W.P. Carey School of Business at Arizona State University, found that the average bonus weight on financial targets for private firms with sales between $50 million and $99 million dropped from 65 percent in 2009 to 51 percent in 2011.

According to a release from the American Institute of Certified Public Accountants (AICPA), which supported the research, this improves the compensation for CFOs because their bonuses are less heavily tied to the company meeting its financial targets.

"Pegging much of a CFO's bonus to earnings targets during a deep recession, is almost like making a swimmer race with cement boots on his feet," Carol Scott, vice president of business, industry and government for the AICPA, said in the release. "But an improved earnings outlook for 2011 and a better balancing of financial and nonfinancial performance targets should help boost bonuses and overall compensation of many CFOs."

According a Wall Street Journal survey, the positive trend can also be seen in the fact that median pay for CFOs of S&P 500 companies increased 19 percent last year.